For personal use only

Size: px

Start display at page:

Download "For personal use only"

Derrick Henry
6 years ago
Views:

1 20 April 2016 ASX Compliance Pty Ltd Level 4, Rialto North Tower 525 Collins Street Melbourne. VIC 3000 GoConnect Limited ACN Level 1, 951 Nepean Hwy, Bentleigh, Victoria 3204 Australia Tel Fax By Attention: John Johansson Dear John, We refer to your letter of 20 April We are pleased to provide our response as set out in this letter. The numbers below correspond with the numbers to the questions in your letter. 1. The principal activities ("Operating Activity") of the Entity continue to be: Development of uctv.fm IPTV. Development and growth of a number of video infotainment and entertainment portals with own content production and third party content. Assisting in the development of the business of Go Green Holdings in respect of the role of the Entity, in product branding and marketing. GoConnect Ltd ("The Entity")'s main business is stated on the Entity's website for some years: "GoConnect is a global media communications company". As a media company, the Entity specializes on media communications, marketing, brand creation and brand marketing. Over the past 16 years, the Entity has developed and marketed a number of brands including GoConnect Free ISP, uctv.fm, undercover, PLW Entertainment, Soundcheck, ToKillFor, GoTrek, m-vision, The Business Show, etc. The Entity has been refocusing its business from Australia to China for more than 3 years as the Australian market is too small for the Company's vision. We have been studying the best way to apply our media, marketing, and communications expertise, and the substantial China online market, with 700 million smartphone users, beckons us. We have also found that brand marketing presents exceptional opportunities in China's agricultural sector, so we have developed strategies to apply our media and marketing expertise to capture opportunities in China's agricultural sector. Our efforts and media marketing expertise have enabled us to earn the 45.45% interest in Go Green Holdings. We cannot book any accounting revenue upon securing the Go Green Holdings shares as the value has not been independently valued for the Entity, and any value can only be accounted for when the shares are sold or agreed to be sold to third parties. The Entity's interest in Go Green Holdings has a book value of $200 as per note 13 of 2014/15 audited accounts; and as per the half-yearly report to 31 December 2015, "Other Financial Assets" of $1.224 million was based on "Gain on revaluation of financial asset" which in turn was based on actual sale for cash and agreed sale of Go Green Holdings shares after balance 1

2 date. The accounting treatment was in accordance with accounting standards. The million Go Green Holdings shares sold represents just 1.22% of the Entity's interest in that company but cannot be used to impute a value for the balance of the Entity's interest in this company which has a book value of $200. These assets could not be described as a significant part of the Entity's assets. 2. No direct cash inflows were generated from the Operating Activity during the financial year ended 30 June 2015 and the current financial year to-date. However, the Entity is able to generate income either in the form of cash revenue or revenue payable in securities depending on the counter party s ability to pay in cash or securities. We would like to refer to the Entity's ASX release of 14 January 2015 in which we reported that GoConnect Ltd licensed the Undercover channel of our IPTV platform exclusively to Centurion for million (equivalent to 6.67 million post share consolidation) Priority One shares and a 5% royalty on net revenue. The agreed value of the Priority One shares at the time of the license agreement was A$5 million. Due to the inability to establish an independent value for the Priority One shares during that financial year, the Entity did not book an accounting revenue for the transaction. However, as disclosed in the two financial reports lodged with ASX last week, the Entity was able to apply 4 million of these Priority One shares (post share consolidation) to settle as at 31 January 2016 with La Jolla Cove Investors of a debt capped at US$700,000 or about A$1 million. This settlement is reported in the accounts lodged with ASX last week. Hence the license fee income earned in the form of Priority One shares in the financial year ended 30 June 2015, is able to be realised to extinguish liabilities during the current financial year. In the current financial year, the Entity also generated A$670,000 cash from sale of Go Green Holdings shares as at the date of half-yearly report. The sale of Go Green Holdings shares during the current financial year follows a similar revenue generating model. Both Priority One shares and Go Green Holdings shares were earned from the Entity's Operating Activity and enable the Entity to access cash capital from their sale. 3. To date, funding of Go Green Holdings' operations has largely been provided by Go Green Holdings other major shareholder. This funding strategy is expected to continue but be supplemented by new shares to be issued by Go Green Holdings or the Entity s contribution. The Entity s contribution to funding Go Green Holdings is based on a strategy supported by sale of securities. However Go Green Holdings is expected to produce revenue within the next 12 months and be self-funded. 4. Listing Rule 4.8 is not applicable as Go Green Holdings is not the main asset of the Entity. The main asset of the Entity continues to be its intellectual property in media and communications of which $4.3 million of intellectual property value was written off in the year ended 30 June This resulted in a negative shareholders' fund of $3.8 million by the half-year ended 31 December Despite the non-cash write-off, the Entity's media intellectual property has continued to support revenue generating activities. 5. The Entity works closely with Go Green Holdings to apply its Internet media experience and marketing expertise to add significant value to Go Green Holdings in the China market, particularly in brand creation, and brand marketing, capitalizing on the Entity s media relationships, knowledge of the online market and the smartphone platform. To further build on the Entity s existing media marketing business, the Entity is finalizing an equal partnership with an overseas company, an expert in brand creation and brand marketing, to establish an agricultural product branding company. The partnership is negotiating on behalf of Go Green Holdings to secure a celebrity brand ambassador for the Go Green table grapes. The partnership will generate additional income which the Entity will share equally. 2

3 The Entity is continuing to explore for on-going licensing income opportunities for its IPTV platform uctv.fm. During the past 6 months, the Entity has been in discussion with the producer of a TV show in the US to co-produce a Chinese version of their US show which has an audience of 20 million viewers. The Entity was approached by the producer to initiate discussion. The show format will be a travelogue of vineyards around the world. Subject to agreement reached with the US TV show producer, the Entity will jointly own the franchise to the Chinese TV show and accordingly, the Entity will be able to use this TV show to help promote the table grape vineyard and the table grape brands. The Chinese show is expected also to be distributed on our IPTV platform uctv.fm worldwide. The Entity is able to dispose of additional Go Green Holdings shares and Priority One shares to generate additional working capital. The Entity is in compliance with Listing Rules 12.1 and Yours faithfully Richard Li Executive Chairman 3

4 20 April 2016 Mr. Richard Li Chairman GoConnect Limited Level 1, 951 Nepean Highway Bentleigh VIC 3204 By Dear Mr. Li GoConnect Limited (the Entity ): ASX QUERY LETTER LISTING RULES 12.1 AND 12.2 ASX Limited ( ASX ) refers to the following: The Entity s annual report for the year ended 30 June 2015 (the Annual Report ) released to ASX at 4:17pm AEST on 13 April The Entity s half-year report for the half-year ended 31 December 2015 ( Half-year Report ) released to ASX at 4:23pm AEST on 13 April The Half-year Report shows that the Entity have nil balance of cash, net current liabilities of $2,747,915, net liabilities of $3,829,196 and have not generated any cash inflows from operating activities. Listing Rule 12.1 requires the level of an entity s operation, in ASX s opinion, to be sufficient to warrant the continued quotation of the entity s securities and its continued listing. Listing Rule 12.2 requires an entity s financial condition (including operating result) must, in ASX s opinion, be adequate to warrant the continued quotation of its securities and its continued listing. Having regard to the above, we ask that you answer the following questions and provide the requested information in a format suitable for release to the market in accordance with Listing Rule 18.7A: 1. What is the Entity s main business activity ( Operating Activity )? We note from the Directors Report contained in the Annual Report that the Entity was continuing to develop IPTV and was developing the business of Go Green Holdings Group ( Go Green ). The Entity s 45.45% interest in Go Green Holdings Limited appears to form a significant part of the Entity s assets as shown at both note 13 to the financial statements contained in the Annual Report and in the Half-year Report. 2. Excluding sale of investments and other non-operating activities, what cash inflows have the Operating Activity generated during the financial year ended 30 June 2015 and this current financial year? ASX Compliance Pty Limited ABN Level 4, North Tower, Rialto 525 Collins Street Melbourne VIC Customer service john.johansson@asx.com.au

3. How is the Entity intending to fund its obligations to the continuous expansion and collaboration with Go Green Holdings Limited including associated costs? 4.

Please note that ASX may require the most recent audited financial accounts for the Entity s investment in Go Green Holdings Limited in accordance with Listing Rule 4.8. 5.

5 3. How is the Entity intending to fund its obligations to the continuous expansion and collaboration with Go Green Holdings Limited including associated costs? 4. What financial statements or other financial information is the Entity able to provide about is investment in Go Green Holdings Limited? Please note that ASX may require the most recent audited financial accounts for the Entity s investment in Go Green Holdings Limited in accordance with Listing Rule Beyond the answers to the questions above, does the Entity have anything further to add in support of its compliance with ASX Listing Rules 12.1 and Your response should be sent to me on john.johansson@asx.com.au. It should not be sent to the Company Announcements Office. A response is requested as soon as possible and, in any event, not later than half an hour before the start of trading (i.e. before 9.30 a.m. A.E.S.T.) on Monday, 25 April ASX reserves the right to release a copy of this letter and your response on the ASX Market Announcements Platform under Listing Rule 18.7A. Accordingly, your response should be in a form suitable for release to the market. Yours sincerely, [Sent electronically without signature] John Johansson Adviser, Listings Compliance (Melbourne) 2/2

For personal use only

For personal use only 16 November 2017 Dean Litis ASX Limited Level 4, North Tower 525 Collins Street MELBOURNE VIC 3000 By email: dean.litis@asx.com.au Jayex Healthcare Limited ( the Company ) Response to ASX Appendix 4C query